- Kakamega Deputy Governor Philip Kutima says recalling manager will pave way for a consultative process that benefits all stakeholders
Image: HILTON OTENYO
The county government of Kakamega has asked KCB Group to recall a receiver-manager appointed to run troubled Mumias Sugar Company to allow for the revival of the public miller.
Deputy Governor Philip Kutima on Wednesday said the move will pave way for a consultative process of reviving Mumias Sugar for the benefit of the community and other stakeholders.
Kutima told a press conference in Kakamega that the county leadership had already engaged its legal team to begin discussions with KCB for a smooth and seamless revival of the debt-ridden company.
“We are aware that any successful initiatives to revive the miller must address governance issues and receive the support of both the national and county government, all sugar sector players including creditors, shareholders and the public,” Kutima said.
KCB on Tuesday announced the appointment of P.V.R. Rao of TACT Consultant Services to be a receiving manager for Mumias Sugar with effect from September 20. KCB said the move was made under the debentures held by the bank over all assets of the miller.
Rao is to run the company and recover over Sh3 billion held by Mumias in debentures that were obtained between 1972 and 2014.
The move appeared to jolt the plan by the county government to implement recommendations by a taskforce appointed by Governor Wycliffe Oparanya to come up with a way to revive the company.
Oparanya launched the taskforce report last month in Mumias.
On Wednesday, Kutima said that the county executive had shared the report with the county assembly for discussion and adoption to pave way for its implementation.
The report cited poor governance, heavy borrowing and investments in projects that never gave returns, high cost of production and a poor farming model among reasons that brought down the miller.
It accused staff of malpractices that resulted in loss of millions of shillings. The malpractices cited include double procurement, single sourcing, overstating of books of account, inflated commercial activities, printing of books and fliers with renowned fraudulent companies and poor record-keeping.
Mumias sugar has remained shut since April last year largely because of unavailability of raw materials occasioned by poaching of cane by rival millers and huge debts it owes to financial institutions, state agencies and suppliers.
The government early this year paid cane farmers their 700 million arrears for their deliveries to the troubled company as part of bailout efforts.
edited by peter obuya